Japan payments start-up Paidy closes $120m Series D
Japanese payments start-up Paidy has raised $120 million in Series D funding from JS Capital Management, Soros Capital Management, Tybourne Capital Management, and Wellington Management.
In addition, the company has upsized its existing warehousing facility with Goldman Sachs, established a second through a syndication led by Mizuho Bank, and obtained a new secured loan facility from Sumitomo Mitsui Banking Corporation. This brings its total equity and debt funding since inception to $585 million, of which the equity portion is $337 million.
Founded in 2008, Paidy provides secure, real-time credit accounts that allow consumers to shop online and settle a single monthly bill using only a mobile phone number and email address. It is said to increase merchant revenues by reducing incomplete transactions, improving conversion rates, boosting average order values, and facilitating easy repeat buying.
As of March, more than 700,000 websites in Japan accepted Paidy. Including the company’s Taiwan-based business, over five million customer accounts are covered. Recent innovations include “three-pay,” which allows customers to split bills into three equal, interest-free, monthly installments for added convenience.
The proceeds of the Series D will go towards growing transactions with large-scale merchants, developing new services, and strengthening the company’s balance sheet in response to the rapid expansion of three-pay, according to a statement.
“We are pleased to be investing in Paidy’s latest round, following our series C investment in the company in Japan. Paidy is building a world-class organization in the BNPL [by now, pay later] space in Japan and we have been very impressed with what the company has accomplished even before the recent round of investment and are excited about its future,” said Eashwar Krishnan, a managing partner at Tybourne.
Tybourne, Soros, and JS took part in the second tranche of the Series C in 2019, with Itochu Corporation providing a top-up the following year. Itochu led the first tranche, worth $55 million, in 2018. After the second tranche, and prior to the top-up, the Series C equity stood at $83 million. Other participants included Goldman, Visa, Eight Roads, and PayPal Ventures.
Alongside the Series C, Paidy secured $60 million in debt financing backed by Goldman, Mizuho Bank, Sumitomo Mitsui Banking Corporation, and Sumitomo Mitsui Trust Bank.
Itochu has backed the company since its $15 million Series B in 2016, with support from Arbor Ventures, SIG Asia, and SBI Investment. The Series A featured MS Capital, CyberAgent Ventures, 500 Startups, Cherubic Ventures, and Recruit Strategic Partners.
Paidy is recognized as one of Japan’s most successful financial technology start-ups. Among its competitors in the local mobile payments are Kyash, which closed a $45 million round last year.
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